Gender pay gap reporting will be the catalyst for a better informed debate on equality in the workplace
Beware the “shrill equal pay brigade” warned a Conservative MP in Parliament last month.
While his sexist rhetoric displayed a staggering disdain for those championing fairer workplaces, he also managed to miss the point. Equal pay is only part of the picture – we need a better informed debate about gender equality in the workplace.
That’s why mandatory Gender Pay Gap reporting for large employers from April 2017 onwards is so important. Securing this was my final hard-won achievement in government, though to David Cameron’s credit he later embraced it with the zeal of an ex-smoker extolling the virtues of cutting out the fags.
What many employers don’t fully realise, but will soon be forced to confront, is that paying men and women equally for doing the same job does not mean you have no gender pay gap. The gender pay gap for an organisation, and indeed for the country, is calculated by comparing the average hourly earnings for men and women. If your senior ranks are packed with blokes (and you’ll struggle to find an organisation where this is not the case), you will have a gender pay gap. And from next year the extent of that gap will be public knowledge.
Shareholders, customers and employees will rightly ask why your pay gap is there, and what you are doing about it. Equal pay is important, and has been a legal requirement for more than four decades, but it is not sufficient. Hoarding power in the hands of a small clique of white men does not make good business sense, as investors increasingly recognise. And it is no longer acceptable to the public.
Gender pay gap reporting is a lens that will bring a wide range of issues into focus: the concentration of men in high-paid sectors and roles, the negative impact of time out of the labour market for caring responsibilities, and simple old-fashioned discrimination. It is right that employers should set out what they are doing to address these imbalances.
It will take until 2069 to close the gender pay gap, according to recent Deloitte research, unless concerted action is taken to encourage more girls and women into lucrative science, technology and engineering subjects and careers. The high attrition rate for women who do enter these fields demonstrates that the solution is not “fixing the women”, but making changes to processes, culture and leadership to tackle the hostile work environment.
Bias needs to be rooted out of promotion procedures, which currently see male managers 40 per cent more likely to be promoted than female managers.
Stark research from the IFS showed the devastating widening of the gender pay gap in the years after having children, reaching as much as 33 per cent 12 years after the birth of a child.
The impact of having a child on the gender pay gap (Source: IFS)
Men who protest that they can’t possibly use shared parental leave or bear more responsibility for child-rearing because it would harm their career should consider their unconscious complicity in the yawning gulf that is the pay gap for women post-childbirth.
In an economy which depends on the talents of both men and women, we need to get smarter about how to combine work and caring. People should not face a career penalty because their family responsibilities as a father, mother, daughter or son prevent them from signing their entire life over to their employer.
We need to bust the myths and end discrimination. The old excuses that women just choose not to rise up the ranks and are less likely to ask for a payrise are discredited. Women are every bit as ambitious as men, but are much more likely to be refused a payrise when they ask. Men are more likely to receive bonuses and, when they do, they get almost double what women receive. And 54,000 women a year are forced out of their jobs due to pregnancy and maternity discrimination.
The need for action is pressing, and Gender Pay Gap reporting is an ideal catalyst. Businesses can choose to get behind it and use it to drive real change, or complacently do the bare minimum to comply. And we’ll all be able to see what they choose.